ILLEGAL money changers will be arrested and prosecuted if they continue to undermine the newly introduced ZiG currency, police said yesterday.
Last week, Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu introduced the new currency, which is backed by the country’s gold and foreign currency reserves. Already almost all banking systems are operating in the new currency, along with most shops and other service providers.
ZiG notes and coins will start circulating on April 30.
The opening of the electronic banking systems has seen illegal money changers back on the street after the first few days of switchover when banks and mobile transaction providers were still upgrading their systems had temporarily forced them to suspend operations.
In an interview yesterday, National police spokesperson, Assistant Commissioner Paul Nyathi, said law enforcement agents will be on the lookout to arrest those who are illegally trading in foreign currency.
He said anyone caught doing illegal dealings and manipulating the ZiG currency will face the law and penalties, including jail sentences and confiscation of the money they would be holding or using.
“Our laws are very clear and anyone who is found committing criminal offences will be prosecuted. We stand guided by the statement from Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, that law enforcement agencies should make sure that money changers are dealt with.
“We are working together with the Reserve Bank of Zimbabwe to end this practice and the law will take its course without fear or favour,” Asst Comm Nyath said.
He also warned money changers not to continue with their illegal dealings, adding that police will be in full force to end the practice.
Under the country’s laws, unlicenced foreign currency traders face up to 10 years in jail if convicted and the loss of their money and assets.
The former Zimbabwe dollar was under continual pressure on the black market, where illegal money changers were on the prowl driving exchange rates high even though their rates are not based on any economic fundamental.
The unjustified surge of the exchange rate pushed by the black market has pushed up the price of goods and services.
Last week, Prof Ncube expressed Government’s commitment to deal with the issue, urging law enforcement agents to take swift action.
He said money changers should be cleared off the streets and heavy fines imposed on them.
“We are going to send out our law enforcement agencies to do their work in a blitz to make sure that these vendors are dealt with. They should be cleared off the streets, and heavy fines imposed on those caught trading in the parallel market. It is illegal. Therefore, if it is illegal, the law must take its course. I am also urging our law enforcement agents to move with speed to deal with this matter. We cannot allow it,” said Prof Ncube.
Recently, Dr Mushayavanhu expressed confidence that the ZiG will turn the tables against the black market, adding that the new currency will not crumble under the weight of the US dollar.
He also indicated that the central bank has enough reserves to satisfy the foreign currency requirements of all legitimate businesses and no company needed to go to the black market to pay for imports.
The central bank and its Monetary Policy Committee, together with other economists, have also predicted that inflation should fall to five percent by year-end with the removal of the exchange rate volatility that has largely driven it.
